Performance improvement by applying lean manufacturing principles at MultiMech

Neethling, Gideon Hugo (2009-03)

Thesis (MBA)--University of Stellenbosch, 2009.

Thesis

ENGLISH ABSTRACT: The political changes in South Africa since 1994 and globalisation have brought about a dramatic increase in competition for South African companies. To ensure long-term survival and success, companies have to focus their strategies on continuous improvement and the ability to adapt to continuous change. Lean manufacturing principles were derived from the Toyota Production System (TPS) which was created by Taiichi Ohna, who is widely credited to be the father of Lean manufacturing principles. Lean principles originated in the automotive industry and transformed an industry that previously focused all its improvement efforts on the theory of mass production. Lean principles can be summarised as continuous improvement through focus on the elimination of waste from processes. Lean principles specify that organisations: • Change from using their view to using the view of the customer when evaluating value-creating activities; • Change production plans that focus on mass production to production plans that produce only what customers want now in flow production with small production batches; • Reduce lead times; • Improve quality; and • Achieve the above-mentioned by eliminating waste in all processes. Lean principles are based on the assumption that once waste is removed, the process improves and results in reduced lead time, improved quality, reduced costs and improved customer service. The aim of this research study was to test Lean principles by implementing applicable parts of it in the engine rebuilding section of MultiMech, a division of Golden Arrow Bus Services. The changes that formed part of the implementation included: • Reduced work in progress through improved production planning; • Improved performance of inbound processes through improved communication based on improved production planning; and • Improved productivity due to improved inbound processes and improved performance measuring. The results from the pilot implementation of Lean principles at the engine rebuilding section support the benefits documented in the theory. The major results were: • An increase in the number of engines built for the months June to September, from 54 in 2007 to 88 in 2008 which represents a 63 per cent improvement in productivity; • A decrease in the number of works orders from 58 to 21, which represents a decrease of 63 per cent in work in progress; and • A reduction in stores' lead time from 3.5 days to 1.4 days, which represents an improvement of 60 per cent. The results from the pilot implementation is only an indication of the total potential that will be realised when Lean principles are implanted throughout MultiMech.

AFRIKAANSE OPSOMMING: Die politieke veranderinge in Suid-Afrika sedert 1994 en globalisering het 'n dramatiese verhoging in mededinging vir Suid-Afrikaanse maatskappye tot gevolg gehad. Ten einde langtermyn oorlewing en sukses te verseker, moet maatskappye hul strategiee fokus op aanhoudende verbetering en die vermoe om by konstante verandering aan te pas. 'Spilvrye' vervaardigingsbeginsels ('Lean manufacturing principles') is afgelei van die Toyota produksiestelsel ('Toyota production system') (TPS), wat ontwikkel is deur Taiichi Ohno, wat algemeen beskou word as die vader van spilvrye vervaardigingsbeginsels. Hierdie beginsels het ontstaan in die motorvervaardigingsindustrie en 'n industrie transformeer wat voorheen al sy verbeteringspogings gefokus het op die teorie van massaproduksie. Spilvrye beginsels kan opgesom word as konstante verbetering deur te fokus op die eliminasie van verspilling uit prosesse. Spilvrye beginsels bepaal dat organisasies: • Nie meer vanuit hulle eie perspektief nie, maar vanuit die klient se perspektief waardeskeppende aktiwiteite beoordeel; • Produksieplanne verander wat fokus op massaproduksie tot produksieplanne wat slegs produseer wat kliente nou wil he in 'n vloeiproduksieproses met klein produksievolumes; • Wagperiodes verminder; • Kwaliteit verbeter; en • Bogenoemde bereik deur verspilling in alle prosesse te elimineer. Spilvrye beginsels is gebaseer op die aanname dat sodra verspilling verwyder is, die proses verbeter en verkorte wagperiodes volg, kwaliteit verbeter, kostes verminder en klientediens verbeter. Die doel van hierdie navorsingstudie was om Spilvrye beginsels te toets deur toepaslike gedeeltes daarvan te implementeer in die enjinbou afdeling van MultiMech, 'n divisie van Golden Arrow busdienste. Die veranderinge wat deel uitgemaak het van die implementering sluit in: • Verminderde werk-in-proses deur verbeterde produksiebeplanning; • Verbeterde prestasie van inkomende prosesse deur verbeterde kommunikasie gebaseer op verbeterde produksiebeplanning; en • Verbeterde produktiwiteit as gevolg van verbeterde inkomende prosesse en verbeterde prestasiemeting. Die resultate van die loodsimplemetering van Spilvrye beginsels by die enjinbou afdeling ondersteun die voordele wat in die teorie gedokumenteer is. Die vernaamste resultate sluit in: • 'n Toename in die aantal enjins gebou vir die maande Junie tot September, van 54 in 2007 tot 88 in 2008 wat 'n 63 persent verbetering in produktiwiteit verteenwoordig; • 'n Afname in die aantal werksopdragte vanaf 58 tot 21, wat 'n afname van 63 persent in werk-in-proses verteenwoordig; en • 'n Afname in store se wagperiode van 3.5 dae tot 1.4 dae, wat 'n verbetering van 60 persent verteenwoordig. Die resultate van die loodsimplementering van Spilvrye beginsels is 'n teken van die totale potensiaal wat gerealiseer sal word met die implementering in ander departemente van MultiMech.

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